BOJ Interest Rate Hike on Horizon Amid Soaring Inflation

The Bank of Japan (BOJ) is set to hold its monetary policy meeting from September 17th to 18th to determine the benchmark interest rate. The current short-term policy rate stands at 1.00%, having been raised from 0.75% in June, followed by a freeze in July.

A CNBC survey of 18 economists and analysts reveals that approximately 89% anticipate a 0.25 percentage point increase at this meeting. If the rate reaches 1.25%, it would mark a new high since 1995.

Rising inflation and wages in Japan are cited as key factors supporting the normalization of monetary policy. The consumer price index rose by 1.9% year-on-year in July, while real wages continued their upward trend for the seventh consecutive month, increasing by 2.4% year-on-year in July.